Australia is the largest global beneficiary of China’s reopening

Australia is the largest global beneficiary of China's reopening

Australia is the largest global beneficiary of China’s reopening

Major events:

  1. An open border for China will raise Australia’s GDP
  2. Reopening to boost Australian GDP by 0.4 percentage point
  3. 50,000 Chinese students will return to learn in Australia

Australia and New Zealand Banking Group ltd said reopening China is expected to raise Australia’s gross domestic product by 0.4 percentage points over the next two years.

Economists at ANZ Bank said in a research note on Wednesday that an increase in the number of Chinese students and travelers, as well as an increase in natural gas exports due to higher industrial activity, will boost economic growth rates.

At least 50,000 students from China will return to Australia in time for the start of the first term later this month after the government in Beijing ruled that degrees earned online would no longer be accredited.

The benefit of Chinese scholarships for Australia:

The increase in expats is likely to add some relief to Australia’s tight job market as students fill vacancies in hospitality services. Economists said: “The return of Chinese students to Australia is very important, as these students need to find a place to live, buy food and pay bills. These living costs account for 57% of education exports and tuition fees make up the rest.”

On the economic front:

Increased service exports to Australia’s number-one trading partner will provide a much-needed boost to growth amid the highest interest rates in 10 years. This may help the central bank in its difficult task of engineering g a response to high inflation.

While ANZ Bank expects a quick return of Chinese visitors, it will be a few years before numbers fully recover due to higher travel costs and delays in processing passports and visas, according to the note.

Stronger industrial activity in China will increase demand for LNG exports, economists said, although there will be a limited upside for iron ore amid the ongoing slump in real estate.